What role gas will play in Australia’s net zero targets

Gas’s phase out will work alongside it becoming a vital transition fuel for electricity generation on the path to net zero, according to experts.

The end of Australia’s climate wars has brought certainty to investors who are pumping billons into the nation’s energy transition, says the Prime Minister.

Gas will be phased out of households but remain a vital transition fuel for electricity generation and powering industry on the path to net zero, leading energy experts say.

The Grattan Institute energy program director Tony Wood told News Corp’s Future Energy event gas will have no role in homes or small businesses in the future.

But it would take “a long time” before those connections were turned off because 5 million homes and businesses are connected to the network.

Australian Energy Producers chief executive officer Samantha McCulloch agreed gas would play a key role in the energy transition. Picture: NewsWire / Sarah Marshall

“And people might take some convincing that cooking with electric induction cooktops is just as good as cooking with gas,” he said.

Australian Energy Producers chief executive officer Samantha McCulloch agreed gas would play a key role in the energy transition, and was an important back-up for renewables.

She said more than 40 per cent of gas use was to fuel other sectors, such as mining and manufacturing.

“We need to look more broadly at that ongoing role for gas and over time there’s new opportunities in terms of how we use that gas too,” she said.

Ms McCulloch said one of those is low-carbon hydrogen production, where natural gas is combined with carbon capture and storage (CCS).

“It’s one of the cheapest ways of producing low-carbon hydrogen, it’s something that’s getting support overseas and something that we should be embracing in Australia in terms of scaling up that hydrogen opportunity,” she said.

Low Emission Technology Australia (LETA) chief executive officer Mark McCallum said CCS was economic at scale – and not just limited to power stations.

“I think it’s really critical to look at the role carbon capture can play already today in terms of those new clean fuels, as well as decarbonising existing power stations, existing steel mills, existing cement industry,” he said.

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The end of Australia’s climate wars has brought certainty to investors who are pumping billons into the nation’s energy transition, says Prime Minister Anthony Albanese.

The market was moving because legislating net zero by 2050 had ended debate about whether climate change was real, apart from on the fringes, he said.

“That’s the key to getting certainly of investment going forward. We know that the cheapest form of new energy is renewables and we know that that is where the market is moving,” Mr Albanese told the Future Energy forum.

“So you have companies like Alexa that are investing billions of dollars in renewables and hydro and storage.”

Mr Albanese also hailed the “incredibly exciting” vision in South Australia of a $593m hydrogen power plant to drive green steel production at Whyalla.

“Economics is what drives change and economics will deliver better results, as well as the other positive benefits for jobs and positioning Australia in the global economy,” he said.

Copenhagen Infrastructure Partners partner Jorn Hammer, whose 11 funds have more than $40bn tapping into global energy transition trends, said Australia had some of the world’s best solar, wind and mineral resources.

“They’re all the fundamentals in Australia. I think what has been lacking is the certainty in that: “This is what we want to do as a country. This is the journey that we want to embark on,” he said.

“ … So we are behind on the development phase, and it does take a little bit of time to get the wheel spinning and start delivering projects.

“But I don’t think that that transition time might be as long as what people think.”

Originally published as What role gas will play in Australia’s net zero targets